Health Care Price Transparency: Recommendations for State and Federal Government Actions

Price transparency – or making price information publicly available – is an idea that has gained steam recently as one more way to reduce health costs and improve quality. So far, that has taken the form of online tools to help private health plan enrollees choose providers. But states and the federal government can also take action to promote price transparency, says a new brief from the Robert Wood Johnson Foundation.

In health care, the word “prices” can mean many things, from the amount a provider charges, to the amount a health plan actually pays, to the amount a consumer pays for care. The RWJF brief focuses on the last of those three:

“Consumers and purchasers need access to information on the actual prices they would pay to providers for specific services to make meaningful distinctions among their options. … Consumers can best take advantage of price information when they are choosing a provider for a specific elective procedure that can be easily compared.”

1) Prohibit gag clauses and anti-competitive prices.

“Gag clauses” in contracts between providers and health plans prohibit health plans from publicly disclosing price information about the providers. Health plans also don’t generally like to reveal the prices they have negotiated with physicians, hospitals, and other providers. Those policies make it difficult for employers to get information about employee health care, not to mention individual consumers.

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The Piper Report blog on healthcare business and policy covers issues in Medicaid, Medicare, and the Affordable Care Act, with articles, interviews, resources, primers, book reviews, and more. Edited by Kip Piper, CEO of Medonomics.